Keystone XL Nebraska ruling sends pipeline's fate back to Washington

The Keystone XL pipeline project has overcome a legal hurdle in Nebraska, clearing the way for U.S. President Barack Obama to approve or reject the controversial project.

Until today, the Obama administration said it was waiting for the Nebraska Supreme Court to rule on a lawsuit brought by Nebraska landowners.

With that court case now decided, the fate of TransCanada’s pipeline project rests in the hands of U.S. lawmakers, who are expected to vote on it today. The legislation was passed in the Republican-controlled House of Representatives at midday on Friday, and will be amended in the Senate.

Obama has said he will veto any bill in favour of Keystone XL, but he could change his mind if Senate amendments align with his own priorities.

TransCanada CEO hails ruling

In a conference call with reporters, TransCanada CEO Russ Girling said his company was "very pleased" with the Nebraska court ruling.

"It removes what we believe is the stated reason for the delay in the presidential approval process," he said. "Now, hopefully that process can pick up where it left off.

"We would hope that we can get on with an approval in a very short time frame."

The project is more necessary than ever, said Girling, in light of falling oil prices.

"The reduction in oil prices, I think some have suggested, makes the project less attractive and potentially less needed, but that’s exactly the opposite of what is true," said Girling.

As oil prices fall, he added, "the need for more efficient transportation is greater."

Natural Resources Minister Greg Rickford said Canada’s government also considers the court ruling good news.

"We welcome the decision," he said. "This now clears the way for the State Department to complete the process."

Alberta Premier Jim Prentice is expected to comment on the Nebraska ruling later today.

U.S. politicians spar over pipeline

Keystone XL has long been a priority for Republicans, who say it would create jobs and contribute to U.S. energy security.

"President Obama is now out of excuses for blocking the Keystone pipeline and the thousands of American jobs it would create," said House of Representatives Speaker John Boehner in a statement today. "Finally, it’s time to start building."

The White House says the U.S. State Department still has work to do before the pipeline can be approved.

"The State Department is examining the court's decision as part of its process to evaluate whether the Keystone XL pipeline project serves the national interest," White House spokesman Eric Schultz said in a statement. "As we have made clear, we are going to let that process play out."

Regardless, Schultz said Obama will veto any congressional bill in favour of the pipeline.

Nebraska Supreme Court ruling

Nebraska’s top court ruled on the constitutionality of a state law that allowed Republican Governor Dave Heineman to determine the route of Keystone XL.

A lower court had previously found TransCanada was a "common carrier" under state law, which would subject the pipeline to approval by Nebraska’s Public Service Commission.

Four out of seven judges on the Nebraska Supreme Court found the pipeline route was determined in violation of the state constitution, but that wasn’t enough to uphold the lower court’s decision. In Nebraska, a "supermajority" of five judges is required to declare a state law unconstitutional.

"No member of this court opines that the law is constitutional," said the ruling. "But the four judges who have determined that (the pipeline law) is unconstitutional, while a majority, are not a supermajority as required under the Nebraska Constitution … Accordingly, we vacate the district court's judgment."

Nebraska landowner Randy Thompson was the lead plaintiff in the lower court case and said he was "disappointed" by the ruling.

"This has been tremendously upsetting for landowners in this process and the fact that political leaders have just tried to kick our butts along with TransCanada has been tremendously disappointing," said Thompson. "It's time for the president to put an end to this damn thing, let us get back to our lives, get back to raising food for America."